Right now, the EURNZD is the easiest currency pair to trade

Well, from my point of view, the easiest currency pair to trade is always the clearest currency pair.

You see, when the market its clear, its way easier to trade because you know what it is likely to do, if its got clear S&R levels, you know at what levels the market is likely to reverse, etc.

Before trading any currency pair, you need to ask yourself 3 questions:

Am I going to trade this pair? (Is it clear enough?)

Which direction am I going to trade this pair?

Until when am I going to trade this pair?

When the market its clear, you have an easy answer to those three questions.

On word of caution though

Tomorrow we’ve got two very important fundamental announcements:

GBP, MPC Official Bank Rate Votes

FOMC Meeting Minutes

The second ones has proven to be the most important announcement of them all (even more impotent than the non-farm payrolls report).

And as you already know, everything is possible with these kind of announcements… so be careful alright?

EURNZD Analysis

So this is why I think the EURNZD is the easiest currency pairs to trade right now:

The first thing that you notice in this chart is that it’s got both: clear S&R levels and clear swings.

Ok, lets see if we get an answer to each one of the three questions above:

Am I going to trade this pair?

Yes, of course, it’s got clear S&R and clear swings, that makes me feel comfortable and confident about how it might behave in the following hours/days.

Which direction am I going to trade this pair?

There is one important principle that you should know about the market: most of the time, it moves from one important level to the other.

So in this case, since it was rejected from an important support level, it is likely to continue its way up until it hits the next resistance level.

Until when am I going to trade this pair?

I’m going to keep looking for long opportunities until it reaches the next LT resistance level which is at 1.6276. Once it gets there, I’m going to wait and see whether the market breaks through that level or gets rejected from it.

Ok, now that you’ve got an answer for each one of the questions above, its time to look for your entry level.

Your turn

What do you think about the methodology I use to choose the currency pairs to trade?

Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

forexft

I’d like to know how you would structure a trade from here pls.

Raul Lopez

Maybe a rejection off the ST support level (around 1.5924) if its got upward pressure… That could be one possibility.

Ofer

Let me get it for a second and I’m not trying to be cynical here: The ECB constantly sends clues about easing its monetary policy at the beginning of June. In addition, it seems that the Eurozone do not provide encouraging economic data lately. Both of these create a low motivation to buy the Euro. People still want to see it getting stronger but the motivation is low.

I can see a scenario that the Euro will go 100-200 pips up, but it has low upside space and the stream of both economic data and the Central Bank’s announcement threaten to send it down.

I’m saying all of this because I want to long the Euro for at least 100 pips but I just can’t find the confidence to do so under these circumstances. It seems like the Euro is in a crossroad from which it might go down or up, with more potential to the downside.

What I really want to hear from you Raul, is whether you have some kind of fundamental support to long the Euro, or is it totally technical issue while ignoring economic conditions? I wonder if there might be some kind of fundamental support or economic wisdom to long the Euro, and if there is such, I really want to know it.

Raul Lopez

Pure technical analysis Ofer, all information including those of the insiders is reflected in the chart…

Fundamental analysis tells you why its going up or down, technical analysis tells you what is it likely to happen, that’s why I only use technical analysis, I dont care about why its moving up or down, I just want to profit from those moves..